0709

Problem

What are the three basic ways to enter foreign markets?

a. What are the main differences between agents and merchants?

Step-by-step solution

Show all steps

Step 1/3

Each and every organization operating in the business environment focuses on expanding their business either nationally or internationally. When considering international expansion, is more complex and challenging than national expansion. Depending on the nature of the target market, the organizations will have to formulate effective strategies.

Step 2/3

The three basic ways to enter a foreign market have been discussed as follows.

• Exporting: This is the approach through which the products are exported to the target market. The organization will have to obtain export licensing in order to enter the desired market.

• Investment: This is an approach through which organizations make investments in their target markets. This can be done through opening showrooms in the target market, strategic alliances, etc.

• Contract: This is an approach through which the organization provides authority to some other firms to run its business operations. Franchising is a contract-based business; foreign market entry tactics

Step 3/3

a. The main differences between agents and merchants have been discussed as follows.

The agents can be considered the brokers that operate between the actors in a network. They can be representatives of manufacturing organizations. The merchants are the direct dealers or distributors of the manufacturing organizations. They can either be wholesalers or retailers.